FILAMER CHRISTIAN INSTITUTE v.

IAC
GR No. 75112, Aug 17, 1992
GUTIERREZ, JR., J.:

Facts:
Allan Masa turned over the vehicle to Funtecha only after driving down a road, negotiating a
sharp dangerous curb, and viewing that the road was clear. (TSN, April 4, 1983, pp. 78-79)
According to Allan's testimony, a fast moving truck with glaring lights nearly hit them so that
they had to swerve to the right to avoid a collision. Upon swerving, they heard a sound as if
something had bumped against the vehicle, but they did not stop to check. Actually, the Pinoy
jeep swerved towards the pedestrian, Potenciano Kapunan who was walking in his lane in the
direction against vehicular traffic, and hit him. Allan affirmed that Funtecha followed his advise
to swerve to the right. (Ibid., p. 79) At the time of the incident (6:30 P.M.) in Roxas City, the
jeep had only one functioning headlight.

Issue: Whether or not there is an employer-employee relationship exists between the

petitioner and its co-defendant Funtecha, and thus, liable to private respondent.

Whether or not the servant was at the time of the accident performing any act in furtherance
of his master's business.

Whether or not Section 14, Rule X, Book III of the Rules implementing the Labor Code applies as
a defense against civil liability.
Held:

After a re-examination of the laws relevant to the facts found by the trial court and the
appellate court, the Court reconsiders its decision. We reinstate the Court of Appeals' decision
penned by the late Justice Desiderio Jurado and concurred in by Justices Jose C. Campos, Jr. and
Serafin E. Camilon. Applying Civil Code provisions, the appellate court affirmed the trial court
decision which ordered the payment of the P20,000.00 liability in the Zenith Insurance
Corporation policy, P10,000.00 moral damages, P4,000.00 litigation and actual expenses, and
P3,000.00 attorney's fees.

Driving the vehicle to and from the house of the school president where both Allan and
Funtecha reside is an act in furtherance of the interest of the petitioner-school.
It is indubitable under the circumstances that the school president had knowledge that the jeep
was routinely driven home for the said purpose. Moreover, it is not improbable that the school
president also had knowledge of Funtecha's possession of a student driver's license and his
desire to undergo driving lessons during the time that he was not in his classrooms.In learning
how to drive while taking the vehicle home in the direction of Allan's house, Funtecha definitely
was not having a joy ride. Funtecha was not driving for the purpose of his enjoyment or for a
"frolic of his own" but ultimately, for the service for which the jeep was intended by the
petitioner school.

Therefore, the Court is constrained to conclude that the act of Funtecha in taking over the
steering wheel was one done for and in behalf of his employer for which act the petitioner-
school cannot deny any responsibility by arguing that it was done beyond the scope of his
janitorial duties. The clause "within the scope of their assigned tasks" for purposes of raising
the presumption of liability of an employer, includes any act done by an employee, in
furtherance of the interests of the employer or for the account of the employer at the time of
the infliction of the injury or damage. (Manuel Casada, 190 Va 906, 59 SE 2d 47 [1950]) Even if
somehow, the employee driving the vehicle derived some benefit from the act, the existence of
a presumptive liability of the employer is determined by answering the question of whether or
not the servant was at the time of the accident performing any act in furtherance of his
master's business. (Kohlman v. Hyland, 210 NW 643, 50 ALR 1437 [1926]; Jameson v. Gavett, 71
P 2d 937 [1937])

Section 14, Rule X, Book III of the Rules implementing the Labor Code, on which the petitioner
anchors its defense, was promulgated by the Secretary of Labor and Employment only for the
purpose of administering and enforcing the provisions of the Labor Code on conditions of
employment. Particularly, Rule X of Book III provides guidelines on the manner by which the
powers of the Labor Secretary shall be exercised; on what records should be kept, maintained
and preserved; on payroll; and on the exclusion of working scholars from, and inclusion of
resident physicians in the employment coverage as far as compliance with the substantive labor
provisions on working conditions, rest periods, and wages, is concerned.
In other words, Rule X is merely a guide to the enforcement of the substantive law on labor.
The Court, thus, makes the distinction and so holds that Section 14, Rule X, Book III of the Rules
is not the decisive law in a civil suit for damages instituted by an injured person during a
vehicular accident against a working student of a school and against the school itself.
The present case does not deal with a labor dispute on conditions of employment between an
alleged employee and an alleged employer. It invokes a claim brought by one for damages for
injury caused by the patently negligent acts of a person, against both doer-employee and his
employer. Hence, the reliance on the implementing rule on labor to disregard the primary
liability of an employer under Article 2180 of the Civil Code is misplaced. An implementing rule
on labor cannot be used by an employer as a shield to avoid liability under the substantive
provisions of the Civil Code.
There is evidence to show that there exists in the present case an extra-contractual obligation
arising from the negligence or reckless imprudence of a person "whose acts or omissions are
imputable, by a legal fiction, to other(s) who are in a position to exercise an absolute or limited
control over (him)." (Bahia v. Litonjua and Leynes, 30 Phil. 624 [1915])
Funtecha is an employee of petitioner Filamer. He need not have an official appointment for a
driver's position in order that the petitioner may be held responsible for his grossly negligent
act, it being sufficient that the act of driving at the time of the incident was for the benefit of
the petitioner. Hence, the fact that Funtecha was not the school driver or was not acting within
the scope of his janitorial duties does not relieve the petitioner of the burden of rebutting the
presumption juris tantum that there was negligence on its part either in the selection
of a servant or employee, or in the supervision over him. The petitioner has failed to show
proof of its having exercised the required diligence of a good father of a family over its
employees Funtecha and Allan.

The Court reiterates that supervision includes the formulation of suitable rules and regulation
for the guidance of its employees and the issuance of proper instructions intended for the
protection of the public and persons with whom the employer has relations through his
employees. (Bahia v. Litonjud and Leynes, supra, at p. 628; Phoenix Construction, Inc. v.
Intermediate Appellate Court, 148 SCRA 353 [1987])
An employer is expected to impose upon its employees the necessary discipline called for in the
performance of any act indispensable to the business and beneficial to their employer.
In the present case, the petitioner has not shown that it has set forth such rules and guidelines
as would prohibit any one of its employees from taking control over its vehicles if one is not the
official driver or prohibiting the driver and son of the Filamer president from authorizing
another employee to drive the school vehicle. Furthermore, the petitioner has failed to prove
that it had imposed sanctions or warned its employees against the use of its vehicles by persons
other than the driver.

The petitioner, thus, has an obligation to pay damages for injury arising from the unskilled
manner by which Funtecha drove the vehicle. (Cangco v. Manila Railroad Co., 38 Phil. 768, 772
[1918]) In the absence of evidence that the petitioner had exercised the diligence of a good
father of a family in the supervision of its employees, the law imposes upon it the vicarious
liability for acts or omissions of its employees. (Umali v. Bacani, 69 SCRA 263 [1976); Poblete v.
Fabros, 93 SCRA 200 [1979]; Kapalaran Bus Liner v. Coronado, 176 SCRA 792 [1989]; Franco v.
Intermediate Appellate Court, 178 SCRA 331 [1989]; Pantranco North Express, Inc. v. Baesa,
179, SCRA 384 [1989]) The liability of the employer is, under Article 2180, primary and solidary.
However, the employer shall have recourse against the negligent employee for whatever
damages are paid to the heirs of the plaintiff.

It is an admitted fact that the actual driver of the school jeep, Allan Masa, was not made a party
defendant in the civil case for damages. This is quite understandable considering that as far as
the injured pedestrian, plaintiff Potenciano Kapunan, was concerned, it was Funtecha who was
the one driving the vehicle and presumably was one authorized by the school to drive. The
plaintiff and his heirs should not now be left to suffer without simultaneous recourse against
the petitioner for the consequent injury caused by a janitor doing a driving chore for the
petitioner even for a short while. For the purpose of recovering damages under the prevailing
circumstances, it is enough that the plaintiff and the private respondent heirs were able to
establish the existence of employer-employee relationship between Funtecha and petitioner
Filamer and the fact that Funtecha was engaged in an act not for an independent purpose of his
own but in furtherance of the business of his employer. A position of responsibility on the part
of the petitioner has thus been satisfactorily demonstrated.
WHEREFORE, the motion for reconsideration of the decision dated October 16, 1990 is hereby
GRANTED. The decision of the respondent appellate court affirming the trial court decision is
REINSTATED.

FACTS:

Kapunan, Sr. an 82 year old retired teacher, was struck by a jeepney owned by Filamer Christian
Institute and driven by its alleged employee, Funtecha. Kapunan was hospitalized for 20 days.
He thus instituted a criminal case against Funtecha alone, who was convicted for serious physical
injuries through reckless imprudence.

Thereafter, pursuant to his reservation, Kapunan instituted a civil case for damages against
Funtecha and Filamer and its president. The RTC and the CA found Filamer, the school, liable
for damages. Hence, this petition.

Filamer contends that it is not civilly liable because Funtecha was not its employee, as he was
only a working scholar assigned to clean the school premises for only two (2) hours in the
morning of each school day. Filamer anchors its contention on Section 14, Rule X of Book III of
the Labor Code,, which excludes working scholars from the employment coverage as far as
substantive labor provisions on working conditions, rest periods, and wages is concerned.

ISSUE:

Is Funtecha an employee of Filamer?

RULING:

YES. It is undisputed that Funtecha was a working student, being a part-time janitor and a
scholar of petitioner Filamer. He was, in relation to the school, an employee even if he was
assigned to clean the school premises for only two (2) hours in the morning of each school day.
In learning how to drive while taking the vehicle home in the direction of Allan’s house,
Funtecha definitely was not having a joy ride. Funtecha was not driving for the purpose of his
enjoyment or for a “frolic of his own” but ultimately, for the service for which the jeep was
intended by the petitioner school. Therefore, the Court is constrained to conclude that the act of
Funtecha in taking over the steering wheel was one done for and in behalf of his employer for
which act the petitioner-school cannot deny any responsibility by arguing that it was done
beyond the scope of his janitorial duties.

Section 14, Rule X, Book III of the Rules implementing the Labor Code, on which the petitioner
anchors its defense, was promulgated by the Secretary of Labor and Employment only for the
purpose of administering and enforcing the provisions of the Labor Code on conditions of
employment. Particularly, Rule X of Book III provides guidelines on the manner by which the
powers of the Labor Secretary shall be exercised; on what records should be kept; maintained
and preserved; on payroll; and on the exclusion of working scholars from, and inclusion of
resident physicians in the employment coverage as far as compliance with the substantive labor
provisions on working conditions, rest periods, and wages, is concerned.

In other words, Rule X is merely a guide to the enforcement of the substantive law on labor. The
Court, thus, makes the distinction and so holds that Section 14, Rule X, Book III of the Rules is
not the decisive law in a civil suit for damages instituted by an injured person during a vehicular
accident against a working student of a school and against the school itself.

The present case does not deal with a labor dispute on conditions of employment between an
alleged employee and an alleged employer. It invokes a claim brought by one for damages for
injury caused by the patently negligent acts of a person, against both doer-employee and his
employer. Hence, the reliance on the implementing rule on labor to disregard the primary
liability of an employer under Article 2180 of the Civil Code is misplaced. An implementing rule
on labor cannot be used by an employer as a shield to avoid liability under the substantive
provisions of the Civil Code. Terrence Anton T. Callao